Marks Says Aversion to U.S. Real Estate Is an Opportunity

Oaktree Capital Group LLC (OAK) Chairman Howard Marks, whose distressed-debt company went public in April, said U.S. real estate including single-family homes are a smart investment because of a general aversion among investors.

“Mistakes cause great opportunities,” Marks, also co- founder of Los Angeles-based Oaktree, said in an interview today on Bloomberg Television’s “Market Makers” with Stephanie Ruhle and Scarlet Fu. “An excess aversion to an asset is a form of a mistake just as an excess desire to buy causes a bubble. Currently, there’s more of an aversion to real estate than to other areas.”

The best real estate investment opportunities are in the U.S. because of the amount of properties available, Marks said. With single-family homes, “the play there will be a comeback in housing,” Marks said.

“One of the mistakes people make is, every time they see a trend, they assume it goes on forever, which is usually exactly what’s not true,” he said. “The truth is, with population growth, people will want a new house some day.”

Oaktree raised $380 million in its April initial public offering, selling 8.84 million shares for $43 each. The company probably closed on at least $4 billion for its next distressed- debt fund in May, according to three prospective investors. The fund had $1.2 billion in commitments as of March 31, Oaktree said in May.

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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